A recent High Court decision underlines the importance of making
sure that you have a proper and registered estate or interest in
any land under Torrens title in NSW.
In the matter of Cassegrain v Gerard Cassegrain & Co Pty
Ltd, the High Court explored the extent to which a registered
title in Torrens title land could be set aside when ownership had
been achieved though fraud. The twist? The registered owner
wasn't the one who committed the fraud.
Felicity became the registerd sole owner of the property –
thanks to a two part process effected largely by her husband,
Claude. Initially, Felicity became a joint tenant in the property
together with Claude – by a transfer from a family company
that was tainted by fraud (known to Claude). Subsequently, Claude
transferred his interest in the property to Felicity, but without
anything being paid by her for that transfer.
Given the circumstances, the High Court reached the conclusion
that Felicity couldn't be held accountable for her
husband's fraud because she was unaware of what he had done.
Felicity was able to keep her title to the half share interest in
the property that she had acquired from the family company.
The High Court did, however, set aside on the application of the
family company her title to the further half share interest that
she acquired from Claude because on that subsequent transfer and
its circumstances she was not a bona fide buyer for value of an
interest in the land.
The majority in the High Court then declared that Felicity was
the registered owner of a half share interest in the land, but with
the other half held by her in trust for the family company –
from which the land had originally been transferred to the couple
as joint tenants.
As you can see, it pays to make sure you go by the book in
relation to any dealings in land under Torrens title – that
way, you can avoid a costly and difficult foray into the
This is something our Property team is always mindful of and we
work hard to ensure our clients achieve registration of their land
titles and avoid being in a position of having to go through the
Court system for declarations of entitlement in regards to land
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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